CenterPoint Energy 2007 Annual Report Download - page 7

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The dividends we paid in 2007, when combined with a 3.3 percent change in
our stock price, produced a total shareholder return of 7.4 percent.
BUILDING ON OUR STRENGTHS
Our company remains focused on creating long-term growth and sustainable
earnings in each of our businesses. For our regulated operations, we work
continuously to improve our business models and are implementing our rate
strategy to give us a better opportunity to earn our authorized rates of return.
In our pipelines and field services businesses, we are capturing growth
opportunities from our unique position in the mid-continent region where
gas drilling and production are at record levels. The focus of our competitive
natural gas sales and services business is on expanding our commercial
and industrial customer base and optimizing the assets used to serve these
customers. Finally, we continue to evaluate the acquisition of other assets
that would complement our existing businesses and create long-term
shareholder value.
This year, each of our businesses strengthened its position in the industry
in which it operates.
Electric transmission and distribution performed in line with our expectations.
While operating income declined $15 million, as we felt the full impact of our
2006 rate case settlement, we added 53,000 new customers. We are confident
that customer growth driven by the strong Houston economy will require
continued investment in needed infrastructure and will position us for
long-term success.
Our strongest growth last year was in natural gas distribution where operating income increased
$94 million, 76 percent over 2006. An improved business model, productivity improvements, more
normal weather and the addition of over 38,000 customers helped this business achieve record
performance. We also worked to implement a rate strategy that separates the recovery of our fixed
operating costs and return on our investment from the volume of natural gas consumed, thus reducing
the impact of unpredictable weather. These progressive rate designs better align the interests of our
company and our customers and support the promotion of energy conservation.
Benefiting from pipeline investments needed to get new natural gas supplies to market, interstate
pipelines saw operating income increase by $56 million, 31 percent over 2006. Income from the first two
phases of our Carthage to Perryville (CP) pipeline accounted for much of the increase. Our growth will
continue in 2008 with the scheduled completion of CP Phase III and the Southeast Supply Header,
a joint venture with Spectra Energy.
“Our company remains focused on creating long-term growth and
sustainable earnings in each of our businesses.”